Palestinians Seeking Foreign Investment at Conference

July 7, 2008 - 7:19 PM

Ramallah, West Bank (AP) - The West Bank is open for business after years of bloody turmoil.

At least that's the intended message of this week's international investors' conference, where the Palestinians are seeking backing for nearly $2 billion in development projects, from fish farms to a new city of 25,000.

The three-day gathering of hundreds of potential investors in the biblical town of Bethlehem is intended to signal a turning point for the Palestinian economy, which has been battered by Israeli-Palestinian fighting and the stifling closure by Israel of hundreds of checkpoints and roadblocks.

Just holding the conference, which begins Wednesday, is a sign of success, said Palestinian Prime Minister Salam Fayyad.

"It's our way of asserting our presence," the U.S.-educated economist told The Associated Press. "We are doing what we can to change reality. This is the antithesis of the barriers."

But skeptics say the conference might be an exercise in futility.

It's impossible to stimulate the economy as long as sweeping trade and movement restrictions remain in place, they say, a view backed by a recent World Bank forecast that the Palestinian economy will remain stagnant.

At best, critics say, the conference would lay the groundwork for investment in better times. At worst, it is creating illusions of progress in Israeli-Palestinian peace efforts where there is little.

"The common sense way is not to jump through hoops, but to end this occupation and let the private sector develop naturally," said Palestinian-American investor Sam Bahour, who manages a $10.2 million West Bank mall and in part blames Israeli restrictions for the project's losses.

In December, donor countries pledged $7.7 billion in aid to the Palestinians over three years, but the World Bank has said the money would only be effective if it's accompanied by an economy recovery.

So far, it's not going well. International Mideast envoy Tony Blair, the former British Prime Minister appointed a year ago to help revive the Palestinian economy, has little to show for his efforts.

In November, sharing a stage with the Israeli defense minister, Blair announced several "quick start projects," including industrial parks that were to create thousands of jobs. However, progress has been slow in part because of disputes with Israel over location and access.

Israeli government spokesman Mark Regev said Sunday that Israel supports the Bethlehem conference and wants to see the Palestinians prosper. "It is clear that a more prosperous West Bank will be more conducive to stability and to peace," he said.

But he said roadblocks cannot be removed hastily because Palestinian militants still pose a threat and could disrupt peace efforts.

Regev said Israel has removed some obstacles: The military announced Sunday that it is dismantling one of 12 roadblocks on Blair's wish list, south of the West Bank city of Hebron. Blair said some of the others may be removed or upgraded in the future, but acknowledged he has not received a timetable from Israel.

According to United Nations figures, the number of checkpoints, roadblocks, dirt mounds, fences and trenches in the West Bank has increased from 561 last fall to 607 today. The closures restrict access to nearly half the West Bank, an area the Palestinians claim as part of a future independent state.

Despite such uncertainties, the West Bank government of moderate Palestinian President Mahmoud Abbas views the conference as an opportunity. Burdened with double-digit unemployment and 40,000 young people entering the job market every year, Abbas has to find solutions quickly.

"Despite the checkpoints, life goes on here," said conference organizer Hassan Abu Libdeh. "We have many good opportunities for investment here."

More than 800 participants, including bankers, factory owners and real estate developers, have signed up for the conference. Fifteen countries are sending official delegations, including several represented by government ministers, such as Jordan, the United Arab Emirates, Sweden, France and Britain. A six-member U.S. delegation is led by Robert Kimmitt, the deputy treasury secretary.

A 142-page catalog presents just over 100 investment projects, from an $11.6 million turkey farm and a $21 million teaching hospital at the West Bank's largest university to a new $350 million town of 5,000 apartments in the West Bank hills north of Ramallah.

Surprisingly, Gaza's private sector, which has largely collapsed over the past year, is presenting a number of projects, from a wedding hall to several fish farms and even a hotel.

Gaza's borders have been virtually sealed by Israel and Egypt since Hamas' violent takeover of the area a year ago, and it is not clear how Gaza's business community expects to attract investment to the volatile area.

Those presenting ideas are required to contribute 20 percent of the cost to show they are serious. A large number of the projects are in construction and information technology, two sectors less hampered by roadblocks than traditional manufacturing. A high demand for housing also makes real estate a relatively safe investment.


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